Bid-Ask Spread

What Does Bid-Ask Spread Mean?
The amount by which the ask price exceeds the bid. This is essentially the difference in price between the highest price that a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it.

Investopedia explains Bid-Ask Spread
For example, if the bid price is $20 and the ask price is $21 then the "bid-ask spread" is $1.

The size of the spread from one asset to another will differ mainly because of the difference in liquidity of each asset. For example, currency is considered the most liquid asset in the world and the bid-ask spread in the currency market is one of the smallest (one-hundredth of a percent). On the other hand, less liquid assets such as a small-cap stock may have spreads that are equivalent to a percent or two of the asset's value

Forex Vs Stock

Forex Vs Stock
Forex (Foreign exchange market) is an inter-bank market that took shape in 1971 when global trade shifted from fixed exchange rates to floating ones. This is a set of transactions among forex market agents involving exchange of specified sums of money in a currency unit of any given nation for currency of another nation at an agreed rate as of any specified date. During exchange, the exchange rate of one currency to another currency is determined simply: by supply and demand – exchange to which both parties agree.A stock market, or (equity market), is a private or public market for the trading of company stock and derivatives of company stock at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.Stocks are usually arbitrary pieces of a company that the board of directors issues to the public so that ownership of the company is distributed among everyone with a piece of stock.The performance of a company’s stock is directly related to the performance of that company greater profits generated by the company translate into higher stock prices. Stocks can be sold off to make a profit or held for future gains.